Saudi Economy Shrinks Most Since 2020 as War Roils Oil Exports

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessSaudi Economy Shrinks Most Since 2020 as War Roils Oil ExportsSaudi Arabia’s economy saw its sharpest quarterly contraction since the Covid-19 pandemic, as the US-Israeli war against Iran poses challenges to the vital oil industry.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.4skdt[11bn(hcpwn)y9amwuj_media_dl_1.png Saudi General Authority for Stat(Bloomberg) — Saudi Arabia’s economy saw its sharpest quarterly contraction since the Covid-19 pandemic, as the US-Israeli war against Iran poses challenges to the vital oil industry.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountGross domestic product shrank 4.8% year-on-year in the three months through June, according to preliminary data from the General Authority for Statistics on Thursday. That compares with growth of 3% in the first quarter.The contraction was driven by an 24.7% decline in the oil sector, versus 2.9% growth in the first quarter. Non-oil activity, a focus for authorities as they attempt to reposition the economy, expanded 0.6% compared with 2.9% last quarter.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe figures highlight the pressures months of war between the US and Iran are placing on the Middle East’s largest economy, with no sign of a definitive peace deal on the horizon. At various stages of the conflict, Tehran has struck US allies across the Persian Gulf, including Saudi Arabian energy facilities. The crisis has effectively blocked for weeks at a time the Strait of Hormuz, the Gulf chokepoint through which a fifth of the world’s oil once transited. Saudi exports via the route resumed in June after a preliminary US-Iran peace deal, only to face renewed Iranian threats when the ceasefire unraveled this month.The world’s largest oil exporter has enacted a workaround, redirecting crude flows via a pipeline to the Red Sea port of Yanbu that offers another exit route to global markets. A fresh threat to Saudi ports and shipping from Iran-backed Houthi rebels in neighboring Yemen has now added risks there too.Saudi oil production levels remain below prewar rates, although the kingdom has partially benefited from spikes in the price of crude, which reached $92.7 a barrel on Thursday.The International Monetary Fund said Saudi Arabia was “showing agility and resilience,” reflecting the kingdom’s “strong macroeconomic fundamentals and diversified oil and logistics infrastructure.”A recovery is expected to take hold when maritime traffic through the Strait of Hormuz gradually returns to normal, the Washington-based lender said in a statement on Wednesday. It expects Saudi economic growth to slow to 1.7% in 2026, before accelerating to 5.5% the following year.Over the medium-term, growth will be supported by “buoyant consumption and investment, including government-led projects and major international events, and by sustained structural reforms under Vision 2030,” said the IMF. This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.